Pricing Construction Risk: Fuzzy Set Application
- 1 December 1993
- journal article
- Published by American Society of Civil Engineers (ASCE) in Journal of Construction Engineering and Management
- Vol. 119 (4), 743-756
- https://doi.org/10.1061/(asce)0733-9364(1993)119:4(743)
Abstract
Contractors may be faced with the problem of deciding the bidding price of a construction project, when the likelihood of the occurrence of risk events and the risk‐associated consequences (monetary loss and gain) are uncertain. If the monetary loss resulting from risk events is not considered or is underestimated due to associated uncertainties, a construction enterprise may suffer a tremendous loss and eventually fail. In this paper, a risk‐pricing method is proposed for analyzing and pricing construction project risk. The method consists of identifying risk elements and quantifying risk‐associated consequences. The uncertainty in the values of the quantified consequences are represented by using a fuzzy set approach and incorporated directly into the bidding price decision process. The proposed risk‐pricing method will assist contractors in the process of estimation under uncertainty. A real construction project is selected to illustrate how the proposed method can be put into practice.Keywords
This publication has 9 references indexed in Scilit:
- Selection of Design/Build Proposal Using Fuzzy‐Logic SystemJournal of Construction Engineering and Management, 1992
- Pricing Hazardous‐Waste Risk RevisitedJournal of Management in Engineering, 1991
- Fuzzy Decision Making In Dredged‐Material ManagementJournal of Environmental Engineering, 1991
- Systematic Risk Management Approach for Construction ProjectsJournal of Construction Engineering and Management, 1990
- Selection of Hazardous Waste Disposal Alternative Using Multi-Attribute Utility Theory and Fuzzy Set AnalysisJournal of Environmental Systems, 1988
- Fuzzy Sets, Decision Making, and Expert SystemsPublished by Springer Science and Business Media LLC ,1987
- Ranking fuzzy numbers with maximizing set and minimizing setFuzzy Sets and Systems, 1985
- Regional management of an aquifer for mining under fuzzy environmental objectivesWater Resources Research, 1983
- Fuzzy setsInformation and Control, 1965